Just as Americans are changing their ideas about what makes a house a home, there’s a new “9 to 5” with the emergence of “knowledge-­based economies” and an “information society” that capitalizes on the generation and distribution of new ideas, technology and other creative content to provide a competitive advantage. The main players in this new economic order are the “creative class” and a growing service sector that works at all hours. As the industrial age has drawn to a close the global economy has come to rely less on proximity to natural resources such as timber, coal and oil, and cities and their suburbs are assuming a heightened role as a result.

“For more than 30 years, the American economy has been in the midst of a sea change, shifting from industry to services and information, and integrating itself far more tightly into a single, global market for goods, labor and capital,” writes Don Peck in a 2011 article in The Atlantic entitled “Can the Middle Class Be Saved?” “To some degree, this transformation has felt disruptive all along. But the pace of the change has quickened since the turn of the millennium, and even more so since the crash.”

Well over half the world’s population now lives in cities, according to a 2012 study for citigroup by The Economist magazine’s Economist Intelligence Unit, which defines cities as metropolitan areas that include both cities and their suburbs (we will use the term “region” when discussing the report). The authors say that for most countries today, economic success hinges on the performance of these metropolitan regions, and that as mass urbanization continues across the world, they will wield greater and greater influence.

The study ranks regions from around the world according to their ability to be competitive — to attract capital, businesses, talent and visitors — and found that while the business and regulatory environment is important, the “quality of human capital” and the quality of life helped the highest-ranking regions sustain a high economic growth rate and harmonious business and social environment.

New York City placed first in the rankings. “I’ve always believed that talent attracts capital more effectively and consistently than capital attracts talent,” New York Mayor Michael Bloomberg says in the Economist Intelligence Unit report.

The study found a clear correlation between human capital and overall competitiveness, and talent was cited as a key difference between many regions in developed and emerging economies, with the former focusing on skills development and the latter on low-cost labor. “Many firms fight to attract highly educated and skilled workers, and as such many choose new [regions] for growth on the basis of the potential talent pool located there,” note the study’s authors. “An ongoing shift toward a more knowledge-oriented economy is exacerbating this process.”

The study also found that while regions of all sizes can be competitive, density is a factor, with bigger regions offering a larger labor pool, higher demand and economies of scale. However, the report’s authors note, these regions must be planned correctly — or else “congestion

and other issues can actively impede their competitiveness” — as well as provide the kind of housing, transportation, lifestyle choices and quality of life that the “talent” they are competing for wants.

This shift toward a knowledge-based economy, however, is leaving some Americans behind: The production and manufacturing jobs that were once the backbone of the American middle class — which accord­ing to a 2012 Pew Research Center Study has shrunk from 61 percent

of the adult population in 1971 to just 51 percent today — have disappeared or moved offshore. The middle class is defined as those with annual household incomes in 2010 between $39,000 and $118,000 for a family of three.

“The notion that we are a society with a large middle class, with lots of economic and social mobility and a belief that each generation does better than the next — these are among the core tenets of what it means to be an American,” Paul Taylor of the Pew Research Center told the Los Angeles Times. “But that’s not necessarily the case any more.”

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The Half-Mile Circles blog is a place to share information about recent research, innovations and other issues related to TOD and livable communities. We also invite experts to talk about their work. Combined with Jeff Wood's The Other Side of the Tracks, the Half-Mile Circles blog is an opportunity for a daily dose of TOD, and allows you to weigh in with your own opinions. Usual blog rules apply; please keep the comment threads civil. To submit an expert article, contact Jeff Wood